Should you buy outside of Sydney or Melbourne?

Should you buy outside of Sydney or Melbourne?

Buying interstate may seem like a daunting task for many. If I can’t drive to the property, then I can’t invest my hard-earned money there? Right? This couldn’t be further from the truth.

The average house price in Australia reached $809,201 in March 2018 according to Domain, with Sydney and Melbourne (Australia’s two most populous cities) exceeding this average.

Unaffordable is a word that quickly springs to the front of most people’s minds. But have you fallen into the trap of thinking you can only buy where you grew up, or reside presently?

For many, Sydney and Melbourne are all that we know, but should that stop you from buying elsewhere?

There are many regions in Australia that are very affordable, trending upward in growth. Better yet, the gross yield achievable in these regions far outweigh the two major cities in Sydney (3.23 per cent) and Melbourne (3.12 per cent), namely due to affordability.

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Unfortunately, many investors will miss out on these great property bargains, as they fear what they don’t know, held back by their very own inhibition.

Let’s use south east Queensland (SEQ) for the next example, those in the know will realise that this region is coming off record lows, spurred on by the GFC, flooding and oversupply in the unit market.

Savvy investors will also know that Queensland has had the third largest population increase (79,580 persons) of any Australian state or territory after Victoria (144,360 persons) and New South Wales (121,790 persons), with Queensland’s annual population growth rate (1.6 per cent) equal to the national average, and the highest rate of growth for both the Australian and Queensland populations since 2012–13 (SEQ accounts for 88.3% of Queensland’s population).

This all equates to very attractive property investment.

The above is not to deter anyone from buying in Sydney or Melbourne, but rather point out that there are many other great property investments to be made, for a fraction of the price and positively geared.

I encourage others to research these very regions and understand the economy, infrastructure, population trends etc that are steering this very growth. Australia’s affordability is enough to deter many, Sydney sitting second most unaffordable in the world, followed closely by Melbourne at fifth.

Yet many feel these are the only markets in Australia, or simply do not know better. There is great buying opportunity for those looking at getting into the Australian property market, with many investments still to be had in the low $300,000’s, 25 minutes from a major CBD, sporting an international airport and a gross regional product of 223 billion, hint hint.

Sydney and Melbourne will always be a great purchase in the long run, history tells us that, but are there better markets right now to invest in? Yes, I believe there is.

Speak to the experts that understand these markets and not just your mate who heard through a friend of a friend. Know that a deposit of $50,000 does in fact get you into a growth market, coupled with strong gross yields.

Do not feel limited to thinking Sydney and Melbourne are the only good markets, as mentioned in the opening lines, this couldn’t be further from the truth.